GHG Emissions Changes: Redrawing baselines

Greenhouse gases (GHG) can be measured by recording emissions at source by estimating the amount emitted using active data and applying relevant conversion factors. These conversion factors allow organizations to calculate GHG emissions from a range of activities. Accurate greenhouse gas reporting is a key deliverable of any sustainability software. A significant part of this challenge is to ensure that the appropriate conversion factors are in place and being applied to energy expenditures correctly. With recent changes to how the Department for Environment, Food and Rural Affairs (DEFRA) calculate CO2 emissions, the potential exists for companies in the UK to experience significant shifts in both individual emission factors and overall Scope 1, 2 and 3 emissions. These changes have been published as part of DEFRA’s greenhouse gas conversion factors for company reporting: methodology paper for emission factors which reviewed the format and content of GHG conversion factors.

Electricity Greenhouse Gas Changes

One of the major changes in the latest GHG emission factor set is separating the GHG emissions associated with electricity consumption into two clear sections: emissions created through electricity generation and emissions created through transmission and distribution of electricity. There is an energy cost in moving electricity around the network and according to the new DEFRA boundaries, any energy spent delivering your electricity to your door can be considered as a third party emission and so would fall into Scope 3. By creating a division between generation and transmission, DEFRA has been able to create a more accurate set of emission factors for use in the calculation of GHG emissions from electricity consumption. Typically, over the last 20 years, around 5-10% of electricity emissions in the UK have come from the transmission and distribution of electricity around the network. Taking this new approach should have no impact on the overall CO2e reported, but it will mean a 5-10% drop in CO2e emissions under Scope 2. Additionally, DEFRA has looked at how best to integrate the emissions from imported electricity into an overall GHG factor. Annually, around 3% of electricity consumed in the UK is imported and the new guidelines calculate this electricity using an emission factor based on the French generation profile.

‘All Scopes’ Factors

In a similar manner to the changes to electricity emission calculation, DEFRA has sought to clarify the boundaries of responsibility for fossil fuel emissions. By eliminating ‘All Scopes’ emission factors, DEFRA aims to make it much easier for companies to understand the boundaries of Scope 1, 2 and 3. Each fossil fuel now has a clear and distinct ‘Well to Tank’ emission factor. This new methodology presents the opportunity to provide more detailed emission factors, with a single fuel expenditure having its GHG emissions broken over more than one scope and so having more than one emission factor. The objective of these changes is to allow companies to understand the difference between direct activity emissions and upstream emissions. Therefore, companies will find it easier to report on Scope 3 emissions, which will allow them to provide their customers with a better understanding of their overall emissions.